Food and prosperity: how Russian farmers will cope with the current crisis, by Athanasius Lavrinenko, Evgenia Pertseva for Izvestia. 05.04.2022.
Putin set a task for the agro-industrial complex to bring agriculture to outstripping growth rates.
Russia is able to provide lower prices for products in the domestic market than in the world . On April 5, Vladimir Putin stated this at a meeting on the development of the agro-industrial and fishery complexes. As for the main food groups, the Russian market is fully provided with its own production . Nevertheless, against the backdrop of the current crisis , the Russian Federation should be more prudent in the supply of products abroad, the president believes . Meanwhile, in the coming years, the authorities plan to bring agriculture to faster growth rates - above 3%.
Against the backdrop of a difficult situation in the international arena, Vladimir Putin holds regular meetings on the situation in key sectors of the economy. This time, government members, heads of Russian banks and other structures focused on issues related to the processing industry and food production.
The situation on the global food market over the past two years has noticeably worsened, the head of the Russian Federation noted. According to him, mistakes in the economic, energy and food policies of developed countries have led to a sharp increase in food prices around the world.
“ And the situation has only gotten worse in recent weeks ,” he added. - Against the backdrop of minimal food supplies in the world, new sanctions are being introduced, the work of enterprises and the logistics of supplying fertilizers from Russia and Belarus are blocked, and their own production of fertilizers in the West is falling due to high prices for natural gas, which is also the result of their activities, in fact , — our partners in the West.
Under the current conditions, a shortage of fertilizers on the global market is inevitable and not all countries will be able to purchase the required volume for the current season , Vladimir Putin is sure. As a result, productivity will also decrease. At the same time, the president warned that developed countries would try to "pull the flow of food onto themselves" through the mechanism of financial emission . And this, in turn, will exacerbate food shortages in the world's poorest regions, spur new waves of migration and, in general, provoke an additional increase in food prices.
Against this background, Vladimir Putin called for an increase in the production and supply to the domestic market of not only high-quality, but also affordable food products , including fish products, in order to minimize negative external effects for Russians. This, according to him, is a key task this year.
“At the same time, it is strategically important to reduce the dependence of the domestic agro-industrial complex and the fishing industry on import purchases, and along the entire chain, as they say, from the field to the counter,” the head of the Russian Federation said.
Particular attention, according to the president, should be paid to such items as seeds and breeding products, vitamins, feed additives, plant protection products . Clear guidelines for import substitution are required here, he believes. However, Russia has been working on the development of the agro-industrial complex since 2014 , when Western countries began to actively impose sanctions, recalled Galina Ryazanova, associate professor of the Department of Institutional Economics at the State University of Management, in an interview with Izvestia. Over the past seven years, agricultural production has increased by 15% and food production by more than 25% .
What is and what is missing
As for the main food groups, the Russian domestic market is fully provided with its own goods . Moreover, for some of them (sunflower oil or grain), the capacities of domestic enterprises cover demand in excess, Vladimir Putin noted. So, at the end of 2020, the Russian Federation became a net exporter of agricultural products . That is, Russia sells more food and agricultural products abroad than it buys.
At the moment, Russian deliveries cover about 160 countries of the world , the head of the Russian Federation said. This year, however, food exports will have to be more prudent, the president warned. At the same time, he stressed that the increased production volumes make it possible to ensure food prices in Russia are lower than on the world market.
Russia, indeed, has no problems with final products, the level of self-sufficiency is very high , Georgy Ostapkovich, director of the HSE Center for Market Research, told Izvestia. He explained that the country has a high level of localization of pork production (almost 100%), beef - 70-75% (the rest is imported by Brazil and Argentina), milk - 60-70% (about 30% is imported by Belarus). Therefore, the population with low incomes will be able to get the basic goods necessary for life, the expert specified.
While high-income people will be able to compensate for premium and luxury products in other countries, he is sure. In production, the situation is different - the Russian Federation depends on the import of seeds, such as potatoes, sugar beets, and crosses (breed hybrids) of chickens and bulls are also actively imported into the country . In addition, manufacturers need foreign harvesting equipment, packaging and other components of the process. However, at the meeting, Vladimir Putin set the task of increasing the production of domestic agricultural machinery, food equipment and components for fishing vessels.
If in the field of production of meat and dairy products and crop production, Russia is almost completely ready to provide for itself, then in the field of breeding and breeding materials, the situation is not so good , added in an interview with Izvestia, a professor at the Department of World Economy and International Economic Relations of the State University of Management Galina Sorokina. According to her, the classical market mechanisms, without the protectionist policy of the state, could almost destroy the enterprises and research institutes involved in breeding.
— The fact is that modern technologies and high production volumes made it possible to sell livestock genetic resources and seeds at significantly lower prices than similar products of national producers, which led to a series of bankruptcies and the exit of Russian breeders from the market. Although Rospotrebnadzor periodically made claims about the quality of foreign genetic material, the expert explained.
As a result, for example, the share of imported crosses in the production of poultry meat is about 95%. A similar situation is with sugar beet seeds, and seeds of domestic corn and sunflower breeding are less than 40%, the expert concluded.
Despite all the difficulties, the authorities set themselves ambitious goals. According to the president, in the coming years, domestic agriculture and food production should reach outstripping growth rates - above 3% . During the meeting, Vladimir Putin supported the government's idea to allocate at least an additional 153 billion rubles to support the agro-industrial complex.